Apple CEO Tim Cook demonstrates as Apple holds an event at the Steve Jobs Theater on its campus in Cupertino, California, US on September 9, 2024.
Manuel Orbegoso | Reuters
Apple's fourth-quarter financial results beat Wall Street expectations for revenue and earnings per share, but net income fell after the company paid a one-time charge as part of a tax ruling in Europe.
Apple shares fell as much as 2% in extended trading on Thursday.
Here's how the iPhone maker fared against LSEG estimates for the quarter ending September 28:
EPS: $1.64, adjusted, vs. $1.60 Estimated revenue: $94.93 billion vs. $94.58 billion Estimated iPhone revenue: $46.22 billion vs. $45.47 billion Estimated Mac revenue: $7.74 billion vs. 7.82 billion Estimated iPad revenue: $6.95 billion vs. $7.09 billion Estimated other products revenue: $9.04 billion vs. $9.21 billion Estimated services revenue: $24.97 billion vs. $25.28 billion Estimated gross margin: 46.2% vs. 46.0 % estimated
Total iPhone revenue rose 6%, the first sign of the iPhone 16's performance in the market. Apple's latest devices were released on September 20, giving Apple about a week of new product sales during the quarter. It remains Apple's most important product, accounting for approximately 49% of the company's total sales.
Apple CEO Tim Cook told CNBC reporter Steve Kovach that iPhone 15 sales were “stronger than 14 in the same quarter last year, and 16 stronger than 15.”
Cook said the company is looking to Apple Intelligence, the artificial intelligence system for iPhone and Mac that began rolling out this week as part of the iOS 18.1 update.
“We've already gotten great feedback from customers and developers and really early stats, just three days' worth of data: users are adopting iOS 18.1 at twice the rate they were adopting 17.1 in the same quarter last year,” Cook said. .
Apple said on a call with analysts that it expects “low to mid-single digits” sales growth during the December quarter. It also indicated that it expects services growth to be almost identical to its growth rate last year, which amounted to 12.87%.
Apple reported $14.73 billion, or 97 cents per share, in net income during the quarter, compared to $22.96 billion, or $1.47 per share, in the same period last year. Apple's adjusted earnings per share, after removing the one-time tax charge, rose 12% year over year.
Revenues rose about 2% for the full fiscal year to $391.04 billion. Revenue in the September period rose 6%. The company's cash pile now stands at $156.65 billion.
During the quarter, apple It paid a one-time income tax charge of $10.2 billion to resolve a long-running case dating back to 2016 over how the company handled taxes in Ireland.
Apple's results cap off a busy week of earnings for the biggest technology companies. alphabet On Tuesday, it reported better-than-expected results, driven by cloud growth. Microsoft issued disappointing guidance on Wednesday, sparking the stock's biggest sell-off in two years, while… dead It exceeded expectations, but warned of a significant acceleration in infrastructure spending next year. Thursday, Amazon It announced strong growth in its cloud business.
Apple's iPad business had the strongest growth of any device line, with sales increasing 8% to $6.95 billion. This was partly due to pent-up demand. Apple released new iPad Pro and Air models in May after going all of 2023 without releasing new iPads.
Revenue in the Mac business rose 2% year over year to $7.74 billion during the quarter, including back-to-school laptop sales. Cook told CNBC that the growth was driven by sales of the MacBook Air, which was updated with new chips in the spring.
Apple's services business — which includes online subscriptions like iCloud, Google Search revenue, and AppleCare warranties for Apple devices — grew 12% year-over-year to nearly $25 billion in sales. However, Apple's services revenue came in within LSEG's consensus forecast.
The company reports sales of AirPods, Homepod speakers, and Apple Watch in a category it calls “other products,” or wearables. This unit came in light of revenue expectations of $9.04 billion, which were down 3% year over year. The company released new Apple Watch and AirPods models during the quarter along with new iPhones.
Apple's results in China, the company's third largest region, are closely followed by investors. The company faces renewed competition from local Chinese phone makers such as Huawei. Apple's revenue in China, Taiwan and Hong Kong fell slightly year over year to $15.03 billion.
The company said it spent $29 billion on stock buybacks and dividends during the quarter.
Watch: Apple Intelligence rollout could be an inflection point, says Daniel Newman, CEO of Futurum Group
